Expert: DoD should plan for large employee downsizing

Apr. 6, 2013 - 01:30PM
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The Defense Department should immediately begin planning for civilian employee layoffs in preparation for a long-term spending squeeze, a defense analyst said Friday.

“Something’s got to give here,” Todd Harrison, a senior fellow with the Center for Strategic and Budgetary Assessments, told reporters at a briefing on the fiscal 2014 budget outlook. The Pentagon should also rein in military pay and benefits and pursue more base closings, he said.

As of December, DoD had about 761,500 employees paid with congressionally appropriated funds, up about 15 percent since Sept. 2001, according to the Office of Personnel Management.

Matching the cuts required under the Budget Control Act would entail “on a rough order of magnitude” a cut of 100,000 full-time equivalents, he said. While doubtful that the Pentagon could pull off that large a reduction-in-force in 2014, Harrison said that planning should begin “as soon as possible,” with possible targets including combatant commands and the Office of the Secretary of Defense that have experienced significant growth. Service contractors should also be cut, he said, but he noted that the Defense Department does not have a headcount on its contractor workforce.

For fiscal 2013, DoD plans to furlough most of its civilian employees for 14 days to help close a $41 billion budget gap stemming from this year’s sequester. Under the Budget Control Act, annual sequesters are set to continue through 2021 unless Congress and the White House agree on another path. Although President Obama is presuming no sequester in his 2014 budget request scheduled for release Wednesday, Harrison doubted that lawmakers and the administration will reach a final agreement before the Oct. 1 beginning of the fiscal year. If Congress instead approves a stopgap continuing resolution, the Pentagon will take another $9 billion cut, Harrison said.

If a sequester ensues next year, the Pentagon will consider a RIF, not furloughs, DoD Comptroller Robert Hale said last week at a webinar sponsored by the Association of Government Accountants.

“The military is not, and should never be, run like a corporation,” Defense Secretary Chuck Hagel said this week at a speech at the National Defense University. But DoD can learn from the private sector’s experience, Hagel said, “in which reducing layers of upper and middle management not only reduces costs and micromanagement, it also leads to more agile and effective organizations and more empowered junior leaders.”